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>I'm racking my brain trying to figure out what's stopping chains from replicating this. Scale. Anything living has a level of variability and likelihood of f

>I'm racking my brain trying to figure out what's stopping chains from replicating this. Scale. Anything living has a level of variability and likelihood of failure/damage/spoilage to it that gets harder and harder to manage as your scale gets bigger. When you're a small shopkeeper who sells about 3 baskets of apples a day, it's both easier to sift through it and throw out the bad ones AND easier to find 3 basket's worth of apples that meet your quality expectations. When you have to move 3 pallet-loads of apples, though, not only does QC become a more complicated endeavor, but you have to find 3 pallet-loads of apples to sell at a competitive price, so you may not have the luxury of being so choosy. When pallet-loads scale up to shipping-containers. . . you can see where I'm going with this. And then there are logistics issues. If you're a large retailer you have to bring everything into centralized warehouses and then send them out. This means things need to travel longer distances and/or have longer shelf-lives. The upshot of that is they have a higher chance of either being past their prime by the time they get to you, or that had to get picked before they were properly ripened on the vine. When you're smaller, have smaller scale suppliers, and less complicated distribution networks a lot of that extra burden falls away. Starbucks had this problem when they first started to get big too. A lot of people give them flack for over-roasting their beans and giving everything a charred/muddied flavor. When they were small they were able to be choosier about the beans. As they grew the scuttlebutt is that there just weren’t enough beans of that quality level on the market, so they had to lower the quality threshold and move to darker roasts. They still sell better beans, but only in select locations.

ThrustVectoring 10y ago
There's also the matter of what trade-offs customers are willing to accept. I suspect that the customers here care a lot more about price, whereas the typical suburban supermarket customers are willing to pay premiums for things like later operating hours, selection of goods, higher likelihood of availability, and the "organic" label on produce.
- athenot 10y ago
  And taste. And freshness. I find a much better selection of flavors at my local Asian mart, and produce is usually a lot fresher since it moves off the shelves fast. Contrast with my local supermarket which sees that same bunch of brussel sprouts stay out all week, until it shrivels up and end up tossing half in the trash.
robrenaud 10y ago
I am skeptical that dis-economies of scale are the reason chinatown is cheap. Why are Amazon and Walmart so successful and cheap?
- stickfigure 10y ago
  I generally agree with your skepticism, although the original source is the WSJ and I generally credit them with an elevated level of economic literacy. Rationalizing your question: Amazon and Walmart predominantly sell shrink-wrap manufactured items with nearly unlimited shelf life and minimal variability. The supply chain is very different and much more forgiving. Walmart does sell groceries, but it's unclear if they're especially successful at it, or if their prices are especially good. I don't feel there's enough information here to encourage or discourage your skepticism.
mncharity 10y ago
I wonder whether this might change with increasingly powerful computer-human hybrid systems. So instead of "I want to grow, and my current 100 suppliers are an unmanageable drag on that." being followed by "I need that consolidated towards 10, so my purchasing agents can talk with them all more often, and thus better manage my supply chain.", it might instead be followed by "I need that replicated towards 1000, so my purchasing software has the sample sizes and redundancy to do the machine learning and statistics to better manage my supply network." > When you're smaller, have smaller scale suppliers, and less complicated distribution network A more complicated to manage network in some ways. Lots of fine grain tactical purchasing with multiple competing suppliers, that you couldn't staff at supermarket scale.
- naravara 10y ago
  >A more complicated to manage network in some ways. Lots of fine grain tactical purchasing with multiple competing suppliers, that you couldn't staff at supermarket scale. Well yes and no. Objectively it is more complicated, but it's a sort of complexity that humans can handle intuitively since it's mostly about personal connections and relationships. It's not as abstracted as more expansive supply-chain logistics are.

ThrustVectoring 10y ago

There's also the matter of what trade-offs customers are willing to accept. I suspect that the customers here care a lot more about price, whereas the typical suburban supermarket customers are willing to pay premiums for things like later operating hours, selection of goods, higher likelihood of availability, and the "organic" label on produce.

athenot 10y ago
And taste. And freshness. I find a much better selection of flavors at my local Asian mart, and produce is usually a lot fresher since it moves off the shelves fast. Contrast with my local supermarket which sees that same bunch of brussel sprouts stay out all week, until it shrivels up and end up tossing half in the trash.

robrenaud 10y ago

I am skeptical that dis-economies of scale are the reason chinatown is cheap. Why are Amazon and Walmart so successful and cheap?

stickfigure 10y ago
I generally agree with your skepticism, although the original source is the WSJ and I generally credit them with an elevated level of economic literacy. Rationalizing your question: Amazon and Walmart predominantly sell shrink-wrap manufactured items with nearly unlimited shelf life and minimal variability. The supply chain is very different and much more forgiving. Walmart does sell groceries, but it's unclear if they're especially successful at it, or if their prices are especially good. I don't feel there's enough information here to encourage or discourage your skepticism.

mncharity 10y ago

I wonder whether this might change with increasingly powerful computer-human hybrid systems. So instead of "I want to grow, and my current 100 suppliers are an unmanageable drag on that." being followed by "I need that consolidated towards 10, so my purchasing agents can talk with them all more often, and thus better manage my supply chain.", it might instead be followed by "I need that replicated towards 1000, so my purchasing software has the sample sizes and redundancy to do the machine learning and statistics to better manage my supply network." > When you're smaller, have smaller scale suppliers, and less complicated distribution network A more complicated to manage network in some ways. Lots of fine grain tactical purchasing with multiple competing suppliers, that you couldn't staff at supermarket scale.

naravara 10y ago
>A more complicated to manage network in some ways. Lots of fine grain tactical purchasing with multiple competing suppliers, that you couldn't staff at supermarket scale. Well yes and no. Objectively it is more complicated, but it's a sort of complexity that humans can handle intuitively since it's mostly about personal connections and relationships. It's not as abstracted as more expansive supply-chain logistics are.